Updated from 8:49 a.m. ESTShares of Vaso Active Pharmaceuticals ( VAPH) were under pressure Wednesday after TheStreet.com reported on an apparent misrepresentation in its promotional literature. The shares were recently trading for $9.27, down $2.19, or 19%, on the Instinet premarket session. Shares of the tiny medical company had been up 545% since its December IPO. The latest mystery involves the foot cream, Termin8, that Vaso Active claims is a "remarkably effective cure" for athlete's foot. On the
In a press release issued after TheStreet.com reported on the trial, Vaso Active said the story contained "inaccuracies" when it "questions the validity of the clinical study" and "the intentions of the company upon reporting the findings." "Biochemics and Vaso Active Pharmaceuticals, the company responsible for marketing Termin8, are pleased to stand behind the data and the statements made by the management team in the company's recent IPO prospectus document," the statement read. Vaso Active, a Danvers, Mass.-based company, is more clear about the independence of the study in the prospectus for its December initial public offering. But the details reveal that it wasn't much of a study at all. The prospectus says the study involved "20 severely infected athlete's foot patients," who were "supervised by independent physicians and analyzed by the New England Medical Center." The study, according to the IPO document, compared Vaso Active's product to Schering-Plough's ( SGP) Tinactin, both of which use the antifungal agent Tolnaftate. All of the patients using deFeet, now called Termin8, allegedly had their infections "eliminated" in 10 days. Meanwhile, Vaso Active claims, it took 42 days for Tinactin to "cure its first patient." This is not the first time Vaso Active has found itself answering questions about Termin8, a product that BioChemics had little success selling for many years. Last week, an investigator with the Securities and Exchange Commission called a Bronx, N.Y., podiatrist, inquiring about an endorsement a medical association gave to the footcare product. The SEC made the call after Dr. David Z. Ascher told a reporter for Barron's that he did not recall the American Association of Medical Foot Specialists ever endorsing Termin8. But in a subsequent interview with the TheStreet.com, Ascher said he was confused when he talked to a Barron's reporter because Termin8 used to be called deFeet. Ascher is the president of the little-known association, which used to be headquartered in a New York City hotel but now appears to be run out of Ascher's medical office. Ascher won't say how many members belong to the association. Ascher said the association was standing behind its endorsement, but he wanted Vaso Active to make a donation to an association scholarship program. Meanwhile, the SEC, according to sources, is continuing to scrutinize other claims Vaso Active has made. An SEC attorney who is investigating Vaso Active could not be reached for comment.